As the deadline for a significant regulatory decision approaches, three prominent U.S.-based asset managers—BlackRock, Grayscale, and Bitwise—have revised their 19b-4 filings with the Securities and Exchange Commission (SEC) concerning their proposed spot Ether exchange-traded funds (ETFs). These amendments, crucially removing provisions related to staking, aim to align the applications with the SEC’s regulatory expectations.
Details of the Amendments
The latest filing adjustments were reported on May 22 from the Nasdaq Stock Market for BlackRock and from the New York Stock Exchange Arca for Grayscale and Bitwise. These amendments specifically addressed the disengagement of any staking activities associated with the Ethereum network’s proof-of-stake model. BlackRock’s revised filing explicitly stated, “Neither the Trust, nor the Sponsor, nor the Ether Custodian, nor any other person associated with the Trust will, directly or indirectly, engage in action where any portion of the Trust’s ETH becomes subject to the Ethereum proof-of-stake validation or is used to earn additional ETH or generate income or other earnings.”
This series of amendments follows similar revisions made by other asset management firms such as Fidelity, VanEck, Franklin Templeton, Invesco Galaxy, and ARK 21Shares on May 21. The collective move to eliminate staking from the ETF proposals seems to be a strategic decision to enhance the likelihood of obtaining regulatory approval by simplifying the investment vehicles and addressing potential regulatory concerns about the complexities and risks associated with staking.
Upcoming SEC Decision
These filings come at a critical time, as the SEC is set to make a decision by May 23 on whether to approve or deny the listing and trading of these spot Ether ETFs. This decision will closely follow the regulatory body’s earlier actions in January when it approved similar investment vehicles for Bitcoin, setting a possible precedent for Ethereum-based products.
The SEC’s upcoming decision is coinciding with broader legislative discussions regarding the regulation of digital assets. The U.S. House of Representatives is currently considering the Financial Innovation and Technology for the 21st Century Act, which aims to clarify the SEC’s role and authority in digital asset regulation. This legislative backdrop adds another layer of complexity and urgency to the SEC’s impending decision on Ether ETFs.
Potential Impact on the Cryptocurrency Market
The approval of spot Ether ETFs is highly anticipated by the cryptocurrency community, as it could significantly impact the market by providing institutional investors with a more regulated and straightforward mechanism to invest in Ethereum. This could potentially increase the adoption rate and stability of Ether.
The asset management firms’ proactive adjustments to their ETF filings underscore their commitment to compliance and their desire to forge ahead in the expanding cryptocurrency ETF space. As the SEC reviews these revised filings, the outcome could herald a new era of investment opportunities for Ethereum and potentially broaden the landscape for cryptocurrency investments.
Featured image credit: Al Drago via Bloomberg